Test 1 Notes - Management Theory and Leadership Practice...

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Management Theory and Leadership Practice Efficiency and effectiveness Why study management? o Employee-learn about company o Outsider- defensive skills o Self- time, organizational o Society- Educate next generation Organization Dynamics o What is e-commerce Commerce-is the exchange of goods and services to improve our standard of living and benefiting both parties o Invisible hang Adam Smith Wealth of Nation Everyone will do their own thing and what they do best o Cost, price, value Value-how much it is worth to you Price-how much you pay Cost- P>C (value needs to be higher than cost) Value of the exchange=value to the buyer-cost to the seller As a manager: maximizes value to the buyer o Profit equation Profit equation profit=Quantity sold*(price sold-variable cost)-fixed costs Contribution margin=price-variable cost [money per unit] Revenue=P*q o Productivity
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Productivity=outputs/inputs Overall output of goods and services produced divided by the inputs needed to generate that output. Increase outputs or decrease inputs Inputs People, materials, equipment, technology, information, capital Managers responsibility is to know both equations and how the variables interact Increase value by lowering price or cost or basic improvements Management History Adam Smith o Division of Labor o Wealth of Nation o In the Pin industry From 200 to 48,000 pins. Improved each operators skill at a specific task Industrial Revolution- CLASSICAL APPROACH o Substitution of machine power for human power o Expansion of railroads o This revolution is really what made management necessary o Management Philosophies Scientific management Taylor o Principles of Scientific Management o “One Best Way” o Soldiering- doing whatever it takes to get by Gilbert’s (Frank and Lillian)
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o Time and Motion Studies o Used motion picture film to analyze tasks Gantt o
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Test 1 Notes - Management Theory and Leadership Practice...

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